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NEW QUESTION: 1
It is January. Which of the following is an appropriate hedging strategy for a corn farmer expecting a harvest in June?
A. Sell July corn futures
B. Buy a call option on corn with an expiry date in or after June
C. Buy June corn futures
D. Sell a put option on corn with an expiry date in or after June
Answer: A
Explanation:
Explanation
Selling July corn futures would be the cheapest and most appropriate risk management strategy for this corn farmer trying to hedge his risk against falling prices. When June comes, he can close out the futures contracts and any loss or gain on the futures contract would be approximately equal to the change in the spot price of corn from January to June.
Buying corn futures is a bad idea because that would require the farmer to buy corn, which would only add to his expected stock of corn expected from the harvest. The same applies to buying a call option on corn. In the same way, selling a put option would be inappropriate because the buyer of the this put would have the right to sell corn to the farmer at the exercise price, which is not what we want. Therefore Choice 'b' is the correct answer.
NEW QUESTION: 2
When inspecting, maintaining and repairing electrical equipment in non-blackout mode, a warning sign or signage should be placed on the electrical installation and work area.
A. False
B. True
Answer: B
NEW QUESTION: 3
Your guest-access wireless network is experiencing degraded performance and excessive latency due to user saturation. Which type of rate limiting can you implement on your network to correct the problem?
A. per-application
B. per-device
C. per-access point
D. per-policy
E. per-controller
Answer: B